Today, an organization wishing to expand its computing capabilities by tapping into the cloud will find a wide range of choices. There are many IaaS (Infrastructure as a Service) hosts, who simply configure a virtual machine and charge for the time resources with which it is configured and the time it's used. The two biggest by far are Amazon Web Services and Microsoft Azure. In addition, there are a wide variety of PaaS vendors who offer specially preconfigured instances of machines that address specific needs (Web server, git host, and so on). The big action is still in IaaS, though, and Microsoft's presence in the #2 spot is curious, but not altogether unexpected.
As I've noted in previous editorials, Microsoft is in the midst of a remarkable corporate turnaround that is affecting almost every IT-oriented product it offers. Microsoft Azure has been the crown jewel in that turnaround and the recent quarterly results show that the company's strategy has been highly successful. The company's revenue is at an all-time high as would have been its income, were it not for one-time charges. Its stock price is near record highs. Compare this with its competitors: Amazon, IBM, and HP, who are all struggling. Amazon lost money again last quarter, IBM's revenue continues to miss expectations, and HP is addressing its slow growth by splitting the company into two parts. IBM and HP are both trying to gain traction for their cloud offerings. Competing with them for what is now third place are Oracle and Google.
Around these principal players are a constellation of niche vendors who either overlap or complement the main offerings: Rackspace, Skytap, Red Hat OpenShift, and VMware/Pivotal's Cloud Foundry.
The problem all these vendors have is attracting business. There is no doubt that as enterprises become more comfortable with the concept of cloud, they will begin moving more of their apps and data to clouds outside the data center. The cloud's ease of use, the quick expansion of computing power, and the ability to push content-download traffic off the data center (among other advantages) are far too attractive to be passed over. But which cloud host to use?
In this unfolding phenomenon, Amazon has the benefit of being the first mover, while Microsoft enjoys the high levels of trust from sites that already use its other enterprise products. All the other vendors are having a hard time differentiating themselves. This was perhaps nowhere more evident last week than at a loud but small event hosted by HP to kick off its developer feature set for the cloud, Helion. While the offering had useful elements (an Eclipse plugin, support for several languages, and useful tools such as SCM built into a PaaS offering), it was difficult to figure out why enterprises would want their developers to use those tools on the HP cloud. The best case the company could make was that HP's cloud is open source and relies on the OpenStack software stack to manage machine instances. While I am a die-hard supporter of open source, I don't find this a compelling advantage. Nor apparently do most cloud customers. Amazon, Microsoft Azure, and Google App Engine all have some open source elements, but they are primarily closed-source offerings. The closed source aspect has not deterred their popularity. So I'm not quite sure why open source would be the stickum by which HP gains traction.
Microsoft's position in this debate is much more secure. It has already added cloud integration to Visual Studio and will continue to add further integration. And if you're an MSDN subscriber, you can use instances of Azure for free. Going from desktop to cloud development with Visual Studio Online is nearly trivial.
HP, by comparison, has no established link to the developer community, except for the few testing tools that it acquired from Mercury Interactive. Now, if HP had offered its QualityCenter product in the cloud as a way for enterprises to quickly spin up additional test machines, it would be on to something. But Quality Center was not part of Helion. In sum, HP defined no benefit to the developer or corporate customers that is unique to HP.
This puts it in the same position as its competitors. IBM, Google, and Oracle are all equally at pains to deliver a message that makes them uniquely attractive. In this regard, Google's inability to recover from the botched roll-out of Google App Engine (GAE) will surely go down as one of the oddest business cases. It launched the product with great fanfare. But developers who flocked to it initially found a difficult platform that supported only a subset of Java and a very old version of Python. Moreover, the interfaces to the proprietary database were poorly thought out, so that almost everything in GAE required platform-specific code-arounds. While GAE has improved in a limited sense since then, Google has not done what Microsoft did revamp the product from top to bottom to make it easy to use. Nor has it leveraged its natural connection to developers. One senses GAE is just not a major priority for Google.
In sum, the world of enterprise cloud hosts is shaping up primarily around enterprise giants who led the parade, made the right moves early, and delivered unique value to their customers. Meanwhile, those who dithered or who have not been able to communicate unique added value are watching frustrated from the sides as the race to the cloud passes them by.